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Constructive Industry 



A MONOGRAPH 

By 

THOHAS COCHRAN 



Constructive Industry. 

A MONOGRAPH 
By 
THOMAS COCHRAN. 



A Plan for the Introduction of a Logical and 
Practical System of Industrial Government ; 
for the Defeat of Paternalism and of Socialism 
in Civil Government; for the Correction of 
Trust, Tariff and Labor Abuses through the 
Separation of Civil Government from Indus- 
trial Economics, to the Purification of Both: 
For the Organization and Regulation of 
Capital, Labor and Management, Under a Pro- 
tected Competitive System Which will Estab- 
lish Justice, Determine Equity in Distribution, 
and Provide a System of Exchanges That will 
Maintain an Equitable Ratio Between Supply 
and Demand. 



"Nothing is so difficult but that it may be 
found out by seeking." — TERENCE. 



Price ten cents. 



Copyright 1905. • : ' THOMAS COCHRAN. 



USRARYof i 


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CONTENTS. 

Page No. 
Competition and Rivalry : Resulting Ten- 
dencies i ,. 3 

Protection, — and its Limitations : Socialism : 
The Functions of Government 6 

The Fundamental Principles of True Eco- 
nomic Government 1 1 

An Announcement 13 

The Plan 14 

A Federal Industrial Government 14 

A System Providing for Combinations of 
Labor, Capital and Management in Con- 
formity with Economic and Civil Law, 
Under the Supervision of a Federal Indus- 
trial Government, Similar in its Organiza- 
tion and Principles of Representation to our 
Federal Civil Government 14 

Conclusion 19 

Comments of the Press 21 

The People Must be Helped to a More Ra- 
tional Understanding of the Basic Principles 
of Industrial Economics, and of How They 
Can be Established, Lest a Ruinous Up- 
heaval Overtake Us 25 



COMPETITION AND RIVALRY: RESULT- 
ING TENDENCIES. 

Under the old school of Political Economy, we 
have been taught to believe that the "rivalry" of 
buyers and sellers, being the competition of the 
market, caused the equitable adjustment of sup- 
ply and demand; therefore, COMPETITION 
was said to be the great "regulative principle" 
which held in check the over-reaching designs 
of individuals and made their selfish efforts con- 
tribute to the general welfare; and it has been 
customary to accept this as the fundamental 
truth of economics, or the basic principle govern- 
ing the industrial community. 

COMPETITION* is defined as the struggle 
for some common object, carried into human af- 
fairs. It is, in general, the contest of individuals 
directed to the same goal. The method of ap- 

*Crabb distinguishes between COMPETITION, 
EMULATION and RIVALRY as follows: 

"COMPETITION expresses the relation of a 
competitor or the act of seeking the same object; EM- 
ULATION expresses a disposition of the mind 
towards particular objects; RIVALRY expresses both 
the relation and the diposition of a rival. 

"Emulation is to comoetition as the motive to the 
action; emulation produces competitors, but it may 
exist without them; the^ have the same marks to dis- 
tinguish them from rivalry. Competition and emu- 
lation have honor for their basis. Rivalry is but a 
desire for selfish gratification. A competitor strives 
to surpass by honest means; he cannot succeed so well 
by any other; a rival is not bound by any principle; 
he seeks to supplant by whatever means seem to 
promise success. An unfair competitor and a generous 
rival are equally unusual and inconsistent. Competi- 
tion seeks to merit success; rivalry is contented with 
obtaining it." 



pointing government officials under civil service 
rules, the contests of political parties, the often 
amusing contest of one city with another for popu- 
lation, the contest of employe with employe, and of 
merchant with merchant, in respect to diligence, 
merit, mechanical and commercial genius, quality 
and service, and a host of similar competitive con- 
tests are emulative; but when a shopman, mer- 
chant or manufacturer tries to draw custom 
by underselling competitors through adulteration, 
the use of short weights, or other fraudulent or 
unfair means, he becomes a rival, rather than an 
emulative competitor : and it is "RIVALRY," or 
the conflict of efforts of buyers and sellers, not 
competition, that we may consider as the regu- 
lative principle of the old school, and the prim- 
itive impulse governing exchange. 

Contests are natural, and, when regulated, are 
wholesome and tend toward development. In the 
operation of natural forces, evolution is the result 
of natural selection and the survival of the fittest ; 
but a condition of such selection and survival is 
the destruction of the weaker and less fit. When 
there is no regulation of contestants, competi- 
tion ends in conflict, in which ethics and fairness 
are unknown, and it results in the advancement of 
one to the injury of others. THIS IS NOT 
TRUE CIVILIZATION. 

If the "commercial rivalry" of the old school 
is, in any way, to the interest of the community 
at large, it is in every way irksome, and 
generally injurious, to competitors. It stifles the 
development of the moral sense, and always tends 
to prevent the correct relation of man to his 
fellows and to natural laws. It has caused com- 



petitors to organize to secure the control of trade, 
exclude or destroy competition, and regulate 
arbitrarily the ratio of supply and demand with 
its resultant, price. It has caused the organiza- 
tion of great aggregations of capital and the 
merging of the rights of individuals in trades 
unions, which have sought to dominate entire 
fields of industrial enterprise, and it has been 
productive of strikes, boycotts, lock-outs, poverty 
and crime. 

Such forms of organization have generally 
been accompanied by influential demands for gov- 
ernment protection or favor, as exemplified origi- 
nally in the mediaeval guilds' charters, and lat- 
terly in subsidies, prohibitive tariffs, and other 
forms of discriminating legislation. 

The abuses resulting from these forced condi- 
tions, and from combats among groups of rival 
organizations controlling among themselves an 
entire commodity, have led to a demand for 
government interference in industrial affairs and 
for increased government supervision, on the one 
hand, by these organizations in the direction of 
extreme Paternalism, and, on the other, and by a 
large element in the community, for government 
ownership and management of business enter- 
prises, or Socialism. If these two opposite ten- 
dencies are not regulated, the spirit of American 
institutions cannot survive. However, organiza- 
tion of the kind that will protect business, prices 
and wages, and at the same time make competi- 
tion in the production, distribution and exchange 
of wealth more equitable and just, is necessary, 
and without such organization the colossal growth 
of modern trade cannot be sustained. 



PROTECTION,^AND ITS LIMITATIONS; 

SOCIALISM: THE FUNCTIONS OF 

GOVERNMENT. 

The principle of protection is established, as 
to prices of staple commodities, on the theory 
that it conserves the interests of labor and cap- 
ital employed in their production. 

No provision is made, however, by this form 
of protection for equity in distribution. 

In a measure such provision has been made 
by more or less imperfect and inefficient forms 
of organization of labor, having, for the most 
part, a merely local effect. 

Now it may be stated as a general principle, 
that price is fixed by capital and is monopolistic, 
and, further, that capital will seek the cheapest 
locality and means of production and the highest 
market for its products, and it is, therefore, not 
local in its operation. Thus we have a protected 
monopolistic price and an unprotected competi- 
tive wage. 

The results of this inequitable combination 
have been disastrous to labor and to the vested 
interests of capital. 

State and local organizations of labor, strong 
within the territorial limits of their communities, 
have repeatedly, by misguided demands, caused 
capital to seek cheaper labor markets. Occa- 
sionally this has resulted in the bodily transfer 
of the sustaining industry of a large community 
to a cheaper labor market ; more frequently, 
however, rival communities, offering labor at 
lower cost, including child labor and convict 
labor under contract, have promoted rival indus- 
trial enterprises which, by reason of smaller cost 

8 



of production and consequent ability to under- 
sell, have secured the control of the market and 
the destruction of equitable competition. 

It is obvious that past and, to a much greater 
degree, present economic conditions, by reason of 
perversion, through monopolistic combinations, of 
the natural law of supply and demand, constitute 
the cause of the present conflicts between Labor 
and Capital, and these conflicts, in turn, lacking 
any means of adjustment or of regulation of their 
cause, have affected unfairly the welfare of the^ 
entire community. 

Without such means of regulation it is impos- 
sible to arrange in detail the relation of produc- 
tion, prices, and wages, make competition emu- 
lative and establish the operation of the basic 
principles of Industrial Economics. 

SOCIALISM. 

The broadest expression of dissatisfaction with 
present conditions and tendencies is Socialism. 

In varying degrees it advocates community, 
municipal and other forms of government owner- 
ship of wealth, and the control of the machinery 
for its production ; and its advocates claim that 
this is a province of civil government. Its more 
conservative exponents confine their claims to 
public service corporations, including transporta- 
tion, telegraph, etc., while the extremists would 
apply this principle to the distribution as well as 
to the production of wealth, to the elimination of 
private ownership. To the extent that socialism 
waives personal rights for the benefit of others, 
it is, within reasonable limits, commendable; to 
the extent that it seeks to restrain monopoly and 



secure equity by constitutional legislation it may 
contribute to the welfare of the community and 
of the state ; but the tendency of Socialism is al- 
ways toward confusion of the functions of the 
state with the private duties and enterprises of 
the individual. 

Socialism is a plan of distribution, not a system 
organized for production. It would destroy 
much of the present machinery of production and 
waste valuable factors in management, instead of 
regulating them. It is in one sense a criticism of 
present distributive agencies, and its strongest 
arguments are their obvious errors and lack of 
equity. IT IS NOT A METHOD OF GOV- 
ERNMENT. 

PRIVATE OWNERSHIP IS, AND MUST 
ALWAYS BE, A FliXED HUMAN INSTITU- 
TION. 

THE FUNCTIONS OF GOVERNMENT. 

The functions of the state, in the process of 
their administration, must necessarily recognize 
industrial and economic conditions, and it is a 
part of the duty of the State to protect and regu- 
late these conditions in their internal as well as 
their external relations, so far as it involves the 
integrity of territory, the reign of law, and the 
administration of justice "for ourselves and our 
posterity." 

It may foster enterprise and the growth of 

industries, but it must not embark in either; it 

may recover its title to the natural facilities of 

production at their market value and should re- 

. cover its title to its natural right of way in the 



well as staple economic commodities ; it may ac- 
quire lands and hold them in trust for the mem- 
bers of a productive industrial community, and 
for the protection of the entire commonwealth, 
and it may lease these lands, subject to proper 
economic regulations, to the highest bidder in the 
open market, if such measures are found to be 
necessary. 

In transportation, the state should, in granting 
charters, define its right of way, and also the 
rights, duties and obligations of the common car- 
rier. The value of the right of way, thus denned 
by the State, would, if expressed in money terms 
equivalent to its actual value, be an asset to the 
community instead of a liability on which inter- 
est or dividends, or both, must be paid from the 
excess over equitable rates on freight and traffic. 
It is the present excess in rates that affords the 
margin against which passes and freight rebates 
are issued, without risk of detection, for the joint 
or several purposes of private gain, corporate 
monopoly and political corruption. 

The elimination of the right of way (which un- 
der the ancient laws of roads belongs to the State) 
from the schedule of assets, under the designa- 
tion of "Appraised Value of Franchise", or equiv- 
alent terms, would leave, as the only basis for 
the issue of railway or similar stocks and bonds, 
the actual value of the equipment and its earn- 
ing power under an equitable lease, and tend to 
secure to the community the great advantage of 
a correct valuation of the common carrier's rights 
and of public service corporation franchises. 

Under these conditions the State would lease 
at the highest market price the privileges now 



commonly given away in the form of franchises, 
which are too frequently obtained through the 
"Third House": It would receive the market 
value of the privileges it assigned or leased, but it 
would not embark in the carrying of passengers 
or freight, the building or equipment of railways, 
or in any other form of commercial traffic. The 
same principle applies to all franchises issued to 
public service corporations. 

A constitutional government cannot consist- 
ently give a franchise, authorize its capitalization 
and permit its sale in the form of stocks and 
bonds, at a valuation based on its earning power 
as a monopoly, and then, by means of inter-state 
commerce or other commissions of inquiry or 
equivalent forms of arbitrary legislation, fix the 
rates to be charged for the service of which 
the franchise has already given an uncondition- 
al monopoly, and on the basis of which the 
unfortunate holder of the uncertain securities 
thus created has purchased his interest. The 
protection of the innocent third party is a funda- 
mental principle of the system of civil law that 
our constitutional government has undertaken to 
establish 

Our Federal Civil Government finds expres- 
sion through three distinct branches ; the Legis- 
lative, the Executive and the Judicial ; their final 
interpretation, the law, which is considered the 
perfection of human reason, holds, as its funda- 
mental basis, that the purity of the judiciary is 
the strongest safeguard of our institutions. Under 
our system of jurisprudence a Judge or a Juror 
is not allowed a voice, in a court of justice, in the 
decision of a cause in which he is involved as a 



party in interest, as a stockholder or otherwise. 
The principle involved in this rule applies in the- 
ory, if not in practice, to the other branches of 
our Civil Government. The absolute separation 
of civil legislation and of executive administration 
from individual and personal relations to the ma- 
chinery for the production of wealth is at least 
as essential to the legislative and executive de- 
partments as it is to the more carefully selected 
judicial branch. 

THE FUNDAMENTAL PRINCIPLES OF 
TRUE ECONOMIC GOVERNMENT. 

The law of supply and demand has failed of its 
natural operation because of monopolistic combina- 
tions of labor, capital and management formed to 
defeat it. Through the operation of the natural 
law of development, producers and consumers, buy- 
ers and sellers, as well as their employes, now real- 
ize that it is necessary for their own protection to 
co-operate, combine and confederate for the com- 
mon good, under one system of management, but 
there is lacking a plan that can be practically ap- 
plied. 

Monopolistic organizations of capital, labor and 
management, being an established fact, SHALL 
SUCH ORGANIZATIONS BE PUBLIC AND 
POLITICAL, OR PRIVATE AND SUBIECT 
TO PUBLICITY AND ECONOMIC CON- 
TROL? This is the great question now before the 
American people. If private, and not regulated 
with due regard for equity, they are plutocratically 
economic; if they are to be supplanted by govern- 
ment ownership and management, they become so- 
cialistically economic: and in the history of nations 

13 



these systems have been "weighed in the balance 
and found wanting," for the reason that they do not 
work both ways. 

What is needed is a system based on ^Justice, 
tEquity and Unity, that will prove all things, hold 
fast to all that is best in the old, accept all that 
is best in the new, and avoid the inequalities and 
extremes of both. 

The final aim and purpose of all members of 
a community of productive industries should be 
directed towards the establishment of these prin- 
ciples in their economic systems, if they desire 
mutual prosperity and its enjoyment in peace and 
good will. 

The highest efficiency of such a community con- 
sistent with justice and equity to the factors in the 
production of wealth, can be reached only by the 
organization of its members on an industrial basis, 
under a federal system of government that will 
separate Industrial Economics from Civil Govern- 
ment, establish Justice and Unity and determine 

"♦JUSTICE is a written or prescribed law to which 
one is bound to conform and make it the rule of one's 
decisions. tEQUITY is a law in our hearts ; it con- 
forms to no rule, but to circumstances and decides by 
the consciousness of right and wrong. The proper 
object of Justice is to secure property; the proper 
object of Equity is to secure the rights of humanity. 
Justice is exclusive, it assigns to everyone his own; 
it preserves the subsisting inequality between men; 
Equity is communicative; it seeks to equalize the con- 
dition of men by a fair distribution. Justice is inflex- 
ible; it follows one invariable rule, which can seldom 
be deviated from, consistently with the general good. 
Equity, on the other hand, varies with the circum- 
stances of the case, and is guided by discretion." 
(Crabb's English Synonyms.) 

14 



Equity in distribution; insure the regulation of ex- 
change on the basis of an equitable ratio between 
supply and demand, exclude improperly related 
(or foreign) capital and labor, and substitute the 
basic principles of true economic government for 
primitive commercial rivalry. 

AN ANNOUNCEMENT. 

After years of research and study in the most im- 
portant branch of Political Economy, Industrial 
Economics, in the search for a system for the regu- 
lation of economic relations, I beg to announce the 
successful completion of my task, and the discovery 
of a plan for the mutual protection and benefit of 
all concerned. Its basis will be mathematically ex- 
act. In operation it will be scientific and practical 
from an economic, ethical or a business view-point. 
It will foster organizatons helpful to the organized 
and to the entire economic community of productive 
industries, without giving cause for government in- 
terference. It will tend to secure the repeal of all 
legislation obstructing beneficial combinations for 
true economic purposes and to correct the abuses 
of trusts, tariff and labor, by the separation of 
Civil Government from Industrial Economics, to 
the purification of both. Finally, it will correct 
the present tendencies towards extreme govern- 
ment Paternalism, on the one hand, and towards 
government management of business enterprises, 
or Socialism, on the other. 

The system, briefly described, means a sure 
solution of the complicated problems of eco- 
nomic relations. It will bring harmony out 
of confusion, protect the rights and increase the 
dignity of commercial genius, ana make Ameri- 
can labor the most contented representative of 

15 



industrial progression in the history of civiliza- 
tion, and it is offered to the American people 
as a defence against the real dangers that threat- 
en our system of government. 

It recognizes the reasonable claims of labor to 
a just consideration of its rights ; it recognizes, al- 
so, the disposition of employers to grant such 
rights through reasonable processes. 

It includes a practical system that will insure 
the freedom of our institutions, in an economic 
sense, and, to our citizens, the enjoyment of lib- 
erty with the protection of the law, and indi- 
vidual freedom with submission to duly consti- 
tuted authority. These are fundamental prin- 
ciples of true economic government. Their prac- 
tical application to our industrial relations is 
THE ONLY WAY OF ESCAPE FROM 
ECONOMIC CRISES. 

THE PLAN. 

A FEDERAL INDUSTRIAL GOVERN- 
MENT. 

A System Providing for Combinations of Labor, 
Capital and Management, in Conformity with 
Economic and Civil Law, Under the Super- 
vision of a Federal Industrial Government Sim- 
ilar in its Organization and Principles of Rep- 
resentation to our Federal Civil Government. 
The plan provides for the inauguration of a 
Federal Industrial Government for the UNITED 
PRODUCTIVE INDUSTRIES OF AMER- 
ICA, similar in organization, as to its three 
branches, the Legislative, the Executive and the 
Judicial, and in principles of representation, to 

16 



our Federal Civil Government, and having foi its 
purpose the supervision and economic regulation 
of the community of productive industries in- 
cluded within the territorial limits of the United 
States of America. 

It will undertake the examination of the rela- 
tions of the productive industries to all Federal 
civil legislation directly affecting the economic 
welfare of the industrial community, including 
tariff, trust and inter-state commerce regulations 
and laws as to immigration and foreign contract 
labor. The laws of the various states affecting 
labor and capital, the authorization of stock com- 
panies, and especially of companies holding fran- 
chises giving them virtual monopolies of trans- 
portation, lighting, water supplies, including ir- 
rigation, and public service utilities generally, 
will receive its careful attention. It will under- 
take to secure sound legislation throughout the 
various states on the subjects of child labor and 
convict labor, and will exert a powerful influence 
for the correction of abuses resulting from care- 
less and pernicious legislation. 

THE LEGISLATIVE: 

In its legislative capacity it will undertake to 
formulate the laws governing its members in 
their economic and industrial relations. 

In all matters of economic welfare it will en- 
courage the representation of the interests in- 
volved, and this representation will be in the 
form of a FEDERAL INDUSTRIAL CON- 
GRESS, which shall be representative in its ca- 
pacity, permanent in organization and equitable 
in purpose. 



The organization of the Federal Industrial 
Government must necessarily be the act of a rep- 
resentative constitutional convention assembled 
for that purpose, and having properly delegated 
authority. Details as to methods of nomination 
and election of Representatives, including the plan 
for the organization of capital, labor and man- 
agement, would be submitted for the approval of 
this delegated convention. It may be stated here, 
however, that the form of representation will be 
as to the various productive industries rather than 
as to territorial districts, and, in point of numbers, 
it will therefore be smaller than the Federal Civil 
Congress. An equitable ratio of representation is 
pledged as to capital, labor and management, 
provision being made for the representation of 
members of the industrial community lacking or- 
ganization. 

To illustrate the principles of representation, 
and taking for example the cotton industry : 
"The State of .Cotton and Cotton Fabrics" 
would be parallel to a civil state, and have 
an administration, a senate and an assembly, 
and representation in the Federal Industrial 
Congress. Local members of this industry 
would be represented in a local indus- 
trial council, which would be parallel to the mu- 
nicipal form of government. The system pro- 
vides for the establishment of Industrial Councils 
in all cities and towns in the United States, thus 
affording to capital, labor and management, local 
representation. 

Members of the industrial "State of Railways 
and Transportation" in the cities and towns of a 
civil state would have representation in each 

18 



local industrial council. 

As to the "State of Realty and Construction," 
those who are employed in associated industries, 
and who are usually classed as being in the build- 
ings trades, would organize under their own 
proper industrial states. 

THE EXECUTIVE: 

It is suggested that the executive shall be 
comprised of a committee of three members, 
representing the three departments of govern- 
ment, who shall be chosen as follows : The 
representative of the Legislative Congress shall 
be elected by a majority vote of all dele- 
gates of the United Productive Industries of 
America ; the representative of the Judiciary shall 
be elected by a majority vote of the members 
of the Supreme Court, or Board of Adjudica- 
tion, that is, by the highest tribunal of the United 
Productive Industries of America; the Chair- 
man, directly representing the Executive Branch, 
— the President of the United Productive In- 
dustries of America, — shall be chosen by a 
majority of the direct votes of all members of 
the United Productive Industries of America who 
shall be in good standing at the time that such 
votes shall be cast. 

This suggestion is, of course, tentative, and 
submitted for general consideration, the theory 
being that a single chief executive involves ex- 
cessive centralization and individual power. The 
details, including organization of primaries for 
the nomination of delegates and for the nomi- 



19 



nation and election of the more responsible officers, 
will, as previously stated, be referred to the pro- 
posed constitutional convention. 



THE JUDICIARY : 

As a parallel to the Federal Judicial System there 
would be a system of industrial tribunals, com- 
prising a supreme arbitration tribunal, with in- 
ferior tribunals in the several industrial states, 
and local tribunals for the settlement of all dis- 
puted questions of equity and the adjustment of 
all controversies and misunderstandings between 
members of combinations and business interests, 
when no question of legal right was involved. 
When a legal question was involved, it would 
have power to determine a working basis, pend- 
ing decision by the civil courts. 

The presiding officer of the Supreme Arbitra- 
tion Tribunal would be vested with powers simi- 
lar to those of the Secretary of the Department 
of Commerce and Labor of the United States, 
and the presiding officers of the inferior tribunals 
would be vested with like power within the juris- 
diction of their respective industrial states and 
localities. 



OTHER DEPARTMENTS. 

In addition to the supreme and inferior tribun- 
als, there would be established a National Secur- 
ities Exchange for the custody of combination 
agreements and securities of owners combining 



their capital under a Federal Security System,* 
a National Produce Exchange, and a Nation- 
al Labor Exchange, all having State and local 
branches, for the determination of equitable and 
just prices, wages, rates for money, etc., and for 
the purpose of establishing a true ratio between 
supply and demand. 

CONCLUSION. 

Under community combinations the element of 
hazardous risk in business enterprise can be mini- 
mized, and the equities of capital, labor and man- 
agreement determined, although their respective 
claims cannot be mathematically adjusted until 
commercial rivalry has been abolished, community 
combinations established and their various in- 
terests brought under the control of the Federal 
Industrial Congress through their respective rep- 
resentatives. 

*The Federal Security System referred to was devised 
by Mr. James Madison Lively, of the Federal Bond and 
Surety Company of New York, to whom the writer 
acknowledges his indebtedness for the suggestion of a 
Federal Industrial Government. This system is a plan 
by which business enterprises can lawfully combine their 
capital with security to all interests against fore-closures, 
re-organizations, unnecessary assessments, exorbitant 
salaries to holders of majority interests, and dis- 
criminating measures against minority stockholders and 
minor interests generally. It has the advantage of hav- 
ing been worked out by a practical business man and 
banker, and has received the approval of some of our 
most conservative financial institutions. In this con- 
nection. I desire also to acknowledge the editorial ser- 
vices of Mr. A. Dickinson Romain. whose knowledge of 
Political Economy as an applied science and of consti- 
tutional law has been of inestimable value. 



The bounds of Equity being clearly defined, and 
Industrial States and Local Councils organized 
and brought under the supervision of a central 
system of government, all the members of our 
industrial communities can combine to carry on 
large undertakings in conformity with our present 
state and national laws, with protection for all 
concerned, without giving occasion for interfer- 
ence by Government, as in the Northern Secur- 
ties and other well known cases, and without 
the present need for concealment of business 
methods, and of equitable profits. 

American citizens are not unreasonable. The 
tendency of American employers and American 
wage-workers is towards universal good-will, the 
uplifting of society and a security of the common 
welfare. The accomplishment of these ends is 
an Herculean task which can be truly appreciated 
when we go back to primitive mankind and fol- 
low its social evolution up to the present stage 
of imperfect civilization, for which imperfection 
no one class of modern society is responsible. 
Our economic defects are the cumulative results 
of the errors and circumstantial necessities ot our 
predecessors, and it is the imperative duty of the 
present age to study the past carefully before it 
condemns the status of any phase of present soc- 
ial conditions. 

There is good reason to believe that we have 
passed the experimental stage in the conquest of 
economic error, and that all the antagonisms of 
industrial, commercial and financial conflicts are 
about to be dissolved into the peaceful solution 
of universal Justice, Unity and Equity. 



COMMENTS OF THE PRESS. 

THE NEW YORK SUN. 

Editorial, November 26, 1904. 

"An Outlook Which Seems Happy." 

"The last election seems to have had one happy 
result. 

"Like the elections of 1896 and 1900, it was not 
a partisan victory, for both parties contributed 
to it, as was made so plainly evident by the poll 
for Mr. Roosevelt in this town. 

"Consequently the election has made possible 
a large, temperate and reasonable discussion of 
questions of politics which once stirred the bit- 
terest and the least profitable and enlightening 
form of controversy. 

"The tariff question, the Southern question, 
financial, industrial and all other great domestic 
and international questions and problems can 
now be discussed in Congress, by newspapers and 
by the people with a view rather to their wise 
solution than to the promotion of any assumed 
partisan interest purely. 

"That is, the American people were never so 
open to reasonable argument as they are now. 
Never were they so magnanimous in spirit, so 
tolerant, so free from the bias of prejudice fatal 
to fair and generous judgment. 

"It looks as if we were entering on a period 
in which controversy for the sake of controversy 
and because of mere pride of opinion would give 
place to a search for reasonable grounds of agree- 
ment." 



23 



From an Editorial, November 29, 1904. 
"For unionism, conducted along proper lines 
toward legitimate ends, the country is entirely- 
ready and the time entirely ripe ; but a ruinous 
upheaval would follow the general adoption by 
organized labor of the revolutionary doctrines 
which emanate from that Cave of Aiullam 
known as Socialism." 

THE EVENING MAIL. 

Saturday, December 17th, 1904. 

"A BETTER TEMPERED PEOPLE." 

"Senator Knox said a true thing simply and 
finely at the Pennsylvania Society dinner this 
week : 

" 'It is evident that the American people now 
approach great questions not only with greater 
breadth of view, but in better temper — that is, 
with more tolerance for the other point of view. 
Difficulties that were formerly thought to be un- 
solvaMe arc now solved. The arbitrator is now, 
to a large extent, doing the work of the bludgeon 
and the lock-out, and, notwithstanding some vic- 
ious and pov/erful agencies working to encourage 
class divisions among the people, I believe there 
is more true democracy of feeling and action now 
than at any time in our history/ 

" 'There is more true democracy of feeling and 
action now than at any time in our history'— the 
statement deserves to be lifted out of its con- 
text because the problems before the American 
people are not small ones and because their solu- 
tion is complicated by Vicious and powerful 

24 



agencies working to encourage class divisions.' 
Nevertheless the people are showing greater 
breadth of view and a more tolerant temper in 
approaching every public subject than at any 
time in their history. 

"Three conspicuous illustrations of this asser- 
tion suggest themselves — tariff revision, the at- 
titude of the State toward organized wealth, the 
Southern race question. There is an element 
that is clamoring for radical action on each of 
these matters and using the language of incendi- 
arism ; but the people refuse to be forced off 
their feet about any of them. 

"Fairness for all, contempt for narrow parti- 
sanship as something undignified and out- 
worn, a desire to prove thoroughly all things that 
are new and hold fast all that is good in the old 
— are these not the salient notes in American 
citizenship? It may have a lot to learn, but at 
least its temper is admirable." 



THE NEW YORK WOKLD. 

Saturday, January 21, 1905. 
Editorial. 

"Mr. Belmont and Municipal Socialism." 
" 'Municipal operation of a transportation sys- 
tem is a mistaken policy/ said August Belmont 
in his interesting speech at the dinner of the 
Chicago Real-Estate Board. Mr. Belmont does 
not object to municipal ownership of public utili- 
ties. He rather approves of it. It is municipal 
operation of these utilities which he protests 
against. 

25 



"Theoretically at least Mr. Belmont is right. 
American cities have already undertaken more 
government than they can adequately administer. 
Any enlargement of functions is not to be lightly 
encouraged ; but there is another side to the cloth 
for all that. 

"The movement in the direction of public own- 
ership and operation of utilities is merely a sym- 
ptom of long-standing corporation abuses. Cities 
are being driven into this business as a choice of 
evils. 

"A decade ago practically all municipal lighting 
was done by private corporations. Excessive 
charges, poor service, fraudulent contracts and 
political corruption on the part of the lighting 
companies aroused so much resentment that cer- 
tain cities made the experiment of establishing 
public lighting plants. The results have been 
sufficiently satisfactory to encourage other cities 
to do the same. 

"In Chicago, where Mr. Belmont was speaking, 
there is a strong sentiment in favor of the city's 
owning and operating its street-railway lines. 
This question is the leading issue in local politics. 

"The people are tired of the poor service, the 
high fares, the stolen franchises and the de- 
bauched Common Councils for which the street- 
car companies are responsible. They have seen 
the public franchises which they gave away cap- 
italized for millions of dollars ; they have seen 
the public-service corporations manipulated ex- 
clusively in the interests of promoters and stock 
gamblers, regardless of the people's rights. They 
have had to endure antiquated rolling stock, in- 
adequate schedules and a demoralized service be- 

26 



cause companies that could earn big dividends 
on the actual investment were swamped in wat- 
ered bonds and watered stock. 

"New York has seen the same thing, and the 
Brooklyn Rapid Transit Company furnishes one 
of the most shameless examples known to the 
country of high-finance looting of public rights. 

"These are the abuses that are quickening the 
demand for municipal ownership and operation 
of public utilities. People are beginning to be- 
lieve that any change is bound to be for the bet- 
ter. They are so sick of being robbed that they 
look kindly upon any expedient that offers even a 
shadowy promise of relief. 

"If Mr. Belmont wishes to check the movement 
toward municipal operation of public utilities in 
New York he can do it in no better way than to 
give the people the kind of transportation service 
they want. He might begin by restoring the for- 
mer service on the elevated roads. He should 
remember that every strap-hanger is likely to be 
an embryo Socialist." 

THE PEOPLE MUST BE HELPED TO A 
MORE RATIONAL UNDERSTANDING 
OF THE BASIC PRINCIPLES OF INDUS- 
TRIAL ECONOMICS, AND OF HOW 
THEY CAN BE ESTABLISHED, LEST A 
RUINOUS UPHEAVAL OVERTAKE US. 

Powerful press support is now being given to 
a concerted effort towards the organization of 
Municipal Ownership Leagues for overthrowing 
the monopoly of public service utilities, by means 
of municipal ownership and management, and, 
in many other directions, socialistic tendencies 

27 



are gaining in power. The more conspicuous ex- 
amples of abuses by monopolies have become in- 
tolerable ; the attempts at legislative and ex- 
ecutive regulation have been unfortunate, as well 
in their inadequacy as in the consequent impair- 
ment of confidence and respect for Government, 
which has been aggravated by extreme construc- 
tions of constitutional powers. 

The minds of men everywhere are seeking, as 
never before, the solution of the problems of eco- 
nomic freedom and of industrial independence, 
and it is important that copies of this monograph 
be placed in the hands of every leader of thought 
in the various trades and professions throughout 
the country, to help the people to a more rational 
understanding of the basic principles of Industrial 
Economics, and to show them how these prin- 
ciples can be established without resort to the un- 
certain remedy of constitutional changes secured 
through biased political representation. 

Correspondence is cordially invited from all 
who are interested in our National and Indus- 
trial welfare. It is desired that all inquiries on this 
subject be made by letter only, addresed to me 
at 45 Broadway, New York. 

THOMAS COCHRAN. 



(V. M. C. 1 105) 



SUBSCRIPTION BLANK. 

, 1905- 
Thomas Cochran, 

45 Broadway, New York. 

Dear Sir : 

Realizing that for the relief of our country 
from periodical agitation to the disturbance of 
business, prices and wages, the abuses of Trusts, 
Tariff and Labor should be corrected; Paternal- 
ism and its opposite, Socialism in Civil Govern- 
ment, defeated ; that Capital, Labor and Manage- 
ment should be organized but regulated and com- 
petition protected; and desiring to encourage 
education of all the people and to aid in the dis- 
semination of knowledge concerning the funda- 
mental principles of Industrial Economics ; the 
undersigned approves of your plan of a central 
federated system of government for productive 
industries as a practical remedy for the growing 
evils, and hereby subscribes for copies 

of your monograph on "Constructive Industry" 
(at the rate of ten cents per copy) and records by 
signature a desire to co-operate in bringing 
about a legal and practical solution of these all 
important problems. 

Name 

Address 



Make all checks payable to Thomas Cochran, 
Treasurer, 45 Broadway, New York. 



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